Tax position of paying for employee COVID-19 tests.

Article | Kate Millard | 23rd November 2020

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To reduce the impact on their business, some employers are choosing to provide their employees with COVID-19 antigen tests. 

HMRC have announced a new temporary exemption to confirm that no benefit in kind arises in respect of employees who are given a relevant coronavirus antigen test by their employer. The exemption does not apply to antibody tests also and will apply to COVID-19 antigen tests provided by an employer from 8 December 2020 to 5 April 2021 inclusive.

HMRC also confirms that if any relevant tests have already been provided earlier in the tax year, HMRC will “exercise its collection and management discretion and will refrain from collecting any Income Tax or Class 1A National Insurance contributions due on the provision of a test”.

As a reminder, where an employer provides employees with immunisations against seasonal flu (“flu jabs”), it is already HMRC policy that the benefit should be treated as a trivial  benefit so that it does not give rise to any income tax or National Insurance consequences. This only applies to routine seasonal flu jabs and does not apply to medical treatment of any sort or to other immunisations. We will be monitoring whether this is expanded to COVID-19 immunisations if they later become available outside of the NHS and the Government wishes to improve take-up.

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About the author

Kate Millard

Kate joined PEM in 2008 and was promoted to Director of Employment Taxes in 2011.

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